Tracking rents is important for understanding the dynamics of the housing market. For example, the sharp increase in rents helped me deduce that there was a surge in household formation in 2021 (See from September 2021: Household Formation Drives Housing Demand). Now that household formation has slowed, and multi-family completions have increased, asking rents are under pressure.
Rents are down 0.1% month-over-month, down 0.7% year-over-year
Welcome to the September 2024 Apartment List National Rent Report. Our model captured an average rent decrease of -0.1% in August, and today the nationwide median rent stands at $1,412. This signals the end of the rental market’s annual busy season, as well as the second consecutive summer of modest rent growth, as the market remains sluggish thanks to a windfall of new supply. If historical trends hold, rents will continue to fall on a monthly basis for the remainder of the year.
Since the second half of 2022, the seasonal declines in rent prices that take place during the fall and winter have been steeper than usual and seasonal increases of the spring and summer have been more mild. As a result, apartments are on average slightly cheaper today than they were one year ago. Year-over-year rent growth currently stands at -0.7 percent and has now been in negative territory for over a full year. Despite this, the national median rent is still more than $200 per month higher than it was just a few years ago.
On the supply side of the rental market, our national vacancy index remains slightly elevated, currently standing at 6.7 percent. After a historic tightening in 2021, multifamily occupancy has been slowly but consistently easing for over two years. And with 2024 bringing the most new apartment completions in decades, we expect that there will continue to be an abundance of vacant units on the market in the year ahead.
Realtor.com: 12th Consecutive Month with Year-over-year Decline in Rents
In July 2024, the U.S. median rent continued to decline year over year for the 12th month in a row, down $12 (-0.7%) for 0-2 bedroom properties across the top 50 metros, faster than the rate of -0.4% seen in June 2024. The median asking rent was $1,741, down by $2 from last month, reflecting a similar seasonal trend as observed in the for-sale market.
Despite the 12th month of decline, the U.S. median rent was just $13 (-0.7%) less than the peak seen in August 2022. Notably, it was still $288 (19.8%) higher than the same time in 2019 (pre-pandemic), but this increase is roughly on par with what has occurred in overall consumer prices (up 22.6% in the five years ending July 2024) and pales in comparison with the 51.9% increase in the median price per square foot of for-sale home listings in the five years ending July 2024.
CoreLogic: Rents “Growing slowly” For Single-Family
